Phil, thank you for all the education here. I've gained so much knowledge being a part of PSW.
Thanks to the rest of the members as well! I appreciate all of the contributions you make.

JeffDoc

Started my membership in mid-Oct and have since then learned so much about options by reading the site's articles and postings, members' chats and suggested trades – as a bonus, the articles are entertaining as well! Phil's long-term investing strategy makes really good sense as I've seen its effect on my GLW positions.
Phil – thanks for sharing your knowledge of the market! I've worked as risk analyst for the investment dept of a $19B insurance company, and the scope and depth of your daily commentaries blows away what I have seen and heard from the PMs and even the chief investment officer! Most of all, I will continue to be a member because you have your priorities right (from my POV) – it's not all about money and power.

Bai2r

I have followed along with your commentary and alerts and have been flabbergasted at your quick analytical skills and your journalistic skills to explain it clearly. In a little over three weeks I have cleared almost 1000.00 dollars and got an intensive education at the same time. I would like to immediately upgrade my membership.

TokyoLife

I think that Phil is super, I am up 39.3% YTD. Thank you for your kindness and the opportunity to observe Phil from February.

KMisko

We are lucky to be in America and it is great to be part of the PSW tribe. Keeps me thinkin' and gatherin' the profits. ~ 42 % gain in my trading account year to date, which keeps me happy. Half to a third of the trading account is reserved in margin capacity that Is not committed. So, again thanks Phil and all of you other members.

Newthugger

You are doing a fantastic job. I think most of us our very well balanced and consequently have learned how to manage through these ever so short declines in the market without panic.

Dclark41

Sold the BG puts I got yesterday at $1.30 for $2 just now. Might be a little early, but I'm happy with that gain. Thanks Phil.

Smasher

I am a Registered Nurse, so is my wife. We work hard to take care of seven kids that are the joy of our lives. The cost for a basic membership is ALOT from our our monthly budget of spending and saving…but well worth it! Phil has allowed me to really ramp up the savings we put away for our children's college funds and our retirement.

David

Phil - FAS - I dont know whether to be happier I averaged down and sold calls or that I got myself out of FAZ the other day…thanks for that help

BCFla

I love it when a trade really comes together. After 4 DD's and a roll, I cashed out 16 times my initial position in TLT today for a 140% gain. Thank you Phil for the lessons in scaling in, and paying for position.

2Can

Phil is a fundamentalist to his fingertips. His ability to value a stock goes well beyond p/e, as he understands the essence of many businesses, what gives them value and how they make their money. As such, his recommendations are invaluable to a investor who takes a value-oriented approach.

Zeroxzero

Phil: I cleaned up today. A rather stark contrast to my untutored performance April/May 2009, after I had written to you to explain how wrong-headed your bearishness was. Many thanks.
I ran into someone once who played on the Bulls with Jordan for quite a few years. He was asked what he had learned from playing with MJ for so long. He smiled and said "Give him the ball."

Zeroxzero

Thanks to your teaching and guidance, I was able to make a killing on my /TF shorts. I averaged into 12 shorts at 1252 and got out of 6 at 1242 and 6 more at 1235. Last week I did the same with /CL, though I got out too early and left $2 on the table. Thank you!

Japarikh

Phil, I don't know how I can thank you enough for your guidance this past week. I'm up significantly in my portfolio and I've never been so relaxed watching the market panic. Thanks once again for being here for us.

thechaser

Phil: Closed out ZION with 49 % gain!

RMM

USO, QQQ- Phil, thanks for these plays. Out of USO for about 65% gain today and just keeping 1/4 QQQ.

Ksone88

Phil/BCS - Didn't realise they traded here. Should've known really. Thanks for the tip. managed to pick some up just before the close at a 15% discount to the UK closing price.

DB

Thanks for your thoughts against buying BP ahead of earnings (yesterdays' member comments). It announced a loss of $3.3b and is down 3% in pre-market but still just above the bottom of the chaneel of $40-$50.

mSquare

Thanks for the USO mention, Phil, 140% on my USO lottery ticket in 12 hours, and no hesitation in taking the money and running — you have trained us well. Sometimes it's teaching, but with this kind of stuff, where you get whipped like a dog if you let 250% profit melt away, it's definitely training. Happy Fourth!!!

Zeroxzero

Phil, I've got to give you props on the ICE spread play. Tremendous call! I jumped in on Friday when you made the recommendation and closed out today. Nice 57% return ($2,300) over a mere 3 trading days! This is why I dig your site!

Samlawyer

WOW!!!!!!!!!!!! How will I ever do anything else in my life that will compare to the wild ride you get trading an ultra etf in the most volatile sector in the stock market the day before option expiration?

Matt1966

I have been very fortunate over the years as an investor. Last year was on of my best in terms of percentage gains. I have to attribute much of this success to my membership in PSW which gave me the best education available anywhere when it comes to the understanding of option trading , discipline and general trading strategies. I will be forever grateful to Phil and the many "highly skilled" traders that have offered their advice.

Gel1

Being on this board is better than successfully completing the Times crossword. Phil's panoply of comments manage to excite, illuminate, frustrate, exasperate, confuse, enlighten, outrage, invigorate and stupefy (and that's par for the morning session only!). But goddammit, it's addictive, informative and when it all goes right extremely profitable.

Winston

I'm just starting my second year as a member, and I'd like to thank all of you for sharing your trading ideas and insight, and especially Phil of course for great all-around investing advice as well as trades! In addition to learning patience and profit-taking, I think one of the most important things I'm learning here is to stick to stocks and trades that suit my temperament. And wow, I had NO idea how hard it was to learn patience. I should say "practice" instead of "learn", because it seems to be a constant struggle. Phil, please keep reminding us how nice CASH is!

Jerseyside

Thank you Phil for this site – the trade discussions on PSW are mind boggling. Future trading while learning to be a value investor. Priceless

Joseph

There are a lot of us that have been here a long time and we all learn something everyday. Just keep asking questions, there are a lot of smart people here and they are willing to help and then of course, you have Phil.

Jr Mints

Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32. Thank, Phil

Bobhu

Phil – BTW, the new STP/LTP coupled with the income portfolio is Perfect! I do not trade all of them, very few actually since I work during market hours. However, following the trades real-time is very educational.
I did enter the ABX call if you recall, I rolled to July on that nonsense news that sent it tumbling. Out today for 110% gain (2.00 stop) not counting covering the loss from the earlier roll. Nonetheless, a good trade.
Keep it up…. Thanks

JFawcett

I subscribed to Phils Stock World full service for a year or so and found that it was extremely helpful. Now I just get the Stock World Weekly summary, which I find invaluable.
Phil does not baby people and certainly can't make someone into a successful stock operator who does not make the effort on their own behalf, but he is extremely generous with his time in answering newbie questions.
Although I found it difficult to follow and implement all his trades in real time, what I did find was that once you got the hang of his methodology and way of thinking, you could work out your own trades and be quite successful. Even just using his patent Rule Number One* alone is worth its weight in gold. Rule Number Two is even better.

Rookie IRA Investor

Phil I have been applying your arsenal (matresses, Edz plays, Ugl verticals etc.) to my gold holdings . So a big thank you for "teaching me how to fish" rather than just giving me the fish...

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Being on this board is better than successfully completing the Times crossword. Phil's panoply of comments manage to excite, illuminate, frustrate, exasperate, confuse, enlighten, outrage, invigorate and stupefy (and that's par for the morning session only!). But goddammit, it's addictive, informative and when it all goes right extremely profitable.

Winston

Thanks super helpful re: UGN example…..other inflation/market-correction-defensive-related play you threw out that has jammed UP in less than a month is TITN 6/14 $15 puts, up 40%. Excuse my enthusiasm but haven't had those types of gains in multiple plays in years let alone days doing it on my own…….maybe I should host the PSW infomercial!!!!

stevegeb200

Phil – great calls this past week, esp. friday and monday. in the old days I would have let Prechter et al scare me into trimming my longs and going short at just the wrong time. your feel for the markets is Tiger-esque. CHK, HOV, BX, TLT and XLF are big winners for me today. My biggest up day in a long time. Thanks!

Terrapin22

I have been reading the "free" PSW for about a year and have always liked Phil's style as it closely resembled the way I like to trade (mostly naked put options). I have been a paid subscriber for about 5 weeks and I have been learning a lot from Phil and other members. I had made some money on Phil's "free" ideas in the past and I joined because one of Phil's futures ideas paid for my subscription within the same day (NG). Phil deserved my subscription and I was eager to learn more. I just did a quick tally and within the last 5 weeks the ideas that I chose to follow from Phil generated over 25K in options profits and 12K in futures profits (some of my trades were more conservative than what Phil's had suggested). I have a lot to learn, experience and confidence to gain. Thanks again Phil and Successful Trading to all.

Verreaul

Phil – BTW, the new STP/LTP coupled with the income portfolio is Perfect! I do not trade all of them, very few actually since I work during market hours. However, following the trades real-time is very educational.
I did enter the ABX call if you recall, I rolled to July on that nonsense news that sent it tumbling. Out today for 110% gain (2.00 stop) not counting covering the loss from the earlier roll. Nonetheless, a good trade.
Keep it up…. Thanks

JFawcett

I have been here a year, and made most of my money back from the 14K fall. The people here are more than willing to help whe Phil cannot get to it. FWIW - This site is my brokerage firm, I was with Wells Fargo Portfolio and it was costing a fortune to trade, the costs here are more than offset with the data, trade ideas and profits you should make.. and I get a chuckle out of Cap and Phil's rantings on healtcare, guns, oh, yeah, and government….

Thanks Phil, for banging the table on getting short and getting to cash. Usually when this happens in the market I am freaking out but I actually made money this week thanks to you. That HOV trade was a great way to re-deploy some of my cash.

Julian

Phil/thankyou. Phil, I went over the recording of last weeks webinar. I liked it a lot and wanted to thank you. I thought the case studies (company reviews) were detailed, I learned more about selling puts process and also what happens if stock continues to go down after that, I liked the fact that we discuss so many different avenues like stocks, optiond, futures, oil, commodities etc… I replayed portions of it multiple times to make sure I was grasping it but wanted to say good job. Thanks…

Nramanuja

Phil/Eric/Cwan/Matt/Cap/etc.. - I've learned so much from all of you and want to thank you. I'm up 23% this month thanks to all of your advice - Thanks, guys!

Josiah

Started my membership in mid-Oct and have since then learned so much about options by reading the site's articles and postings, members' chats and suggested trades – as a bonus, the articles are entertaining as well! Phil's long-term investing strategy makes really good sense as I've seen its effect on my GLW positions.
Phil – thanks for sharing your knowledge of the market! I've worked as risk analyst for the investment dept of a $19B insurance company, and the scope and depth of your daily commentaries blows away what I have seen and heard from the PMs and even the chief investment officer! Most of all, I will continue to be a member because you have your priorities right (from my POV) – it's not all about money and power.

Bai2r

Best year I've ever had…sitting on a 52% YTD return. I would also echo Nat's shout out for Phil's talent. I've been a member for the 6 years or so. Just stay true to the strategy I've learned over the years of selling premium, keeping the bulk of my portfolio in long-term buy writes ("armchair" trades).

JJennings

I am not a user of phil's site now, but was for a couple years. His advice and information is excellent. Perhaps even better, you get access to real-time trades of additional traders on his site (OptTrader, etc) and the other members who post what they are buying and selling. Overall, its a very valuable information tool. Expensive, but paid for itself many times over. I did not renew my membership because I switched jobs and did not have time to trade nearly as much.

XRTrader

Phil - Thanks for the welcoming gift of the POT at a buck
Just paid for this month and my membership is not even 24 hours old!
looking forward to many more - bk

Bjkeck

Nice call on the QQQ puts this morning Phil. I bought 10 at .13 this morning for fun day trade. Just closed at .95. Sweet hedge for the day!

RevTodd64

Great calls this week!

SNS1

Phil - Another excellent teaching article - when you write like that it blows me away. Thank you!
I had the ideas from earlier articles but what I didn't have was enough understanding. The familiarity of ideas through repetition, re-working, revision - over time - the variation, the pulling out of implications - it all contributes to understanding and mostly thats on the student - but a good teacher (worth their weight in gold) makes understanding a pleasure.
I wanted to learn about trading options because it makes my brain feel better - fitter, healthier. Actually mostly it makes me happy to think about the trade and trading options.
You are a good teacher and I know that or I wouldn't value the subscription the way I do. It pays for itself through the pleasure of understanding alone.

Redfern1

Phil...The hundred grand portfolio updates are helpful...Fun ..and have been profitable...really like em... made some nice entries into USB, KEY today... and I better add those FAZ calls tomorrow... Really glad you put that up this morning...

Becker

Phil - I'm with you just little bit longer than a month and you can not imagine how happy I am now, and not just because my P/L improved ( and I'm sure that it will be even better), but I found that the worst thing in trader's carrier is a LONELINESS. Here I found so many bright good guys, I looked for this service for years.
THANK YOU AND TAKE GOOD CARE OF YOURSELF BECAUSE I PLAN TO STAY HERE AND RIDE THIS CREASY MARKET WITH YOU FOR ANOTHER 20-30 YEARS

Tchayipov

You guys gotta give it to phil–the voice of reason yesterday, last nite and this morning.

Corleone

Thanks Phil, your note at the close was responsible for making those silly GOOG sellers pay for my NYC sojourn, nice!!

zeroxzero

Personally I admire and respect you disciplined approach to investing. My style is at the extreme side of aggressive and I have to learn how to be less that way. If I yell " Let it Ride" at my house, no one says a word so I can't use that to temper my behavior. Phil has done a pretty good job of knocking some of my potential moves and as a result, I have increased my portfolio value by almost 25% since late July.

DoubleD

Phil - Your logic not only makes sense, but it made a lot of premium profit for me over the past 12 months. I have recovered much of the massive equity losses of last year. My Monday play is the sale of long term puts on FXI. Love the premium!

Gel1

PHIL: The most important lesson I have learned is how to hedge using SQQQ, SDS and TZA. A big thanks.

IHS4God

I've been trading/investing since the early 80's (my dad started me out young). I've had seven figure accounts (in the past) and I've done lots of trading, so I can say that I'm a well seasoned investor. Phil is the real deal. His trades make sense and his strategy is sound. He sees things that others miss and he's one of the best at finding price anomalies. When he makes a mistake, he has an exit strategy already planned. He hedges very well and he has an instict which tells him to go to cash or to be all in.

Autolander

Hey I just did a nice options trade on LL for $800 (50%) gain thanks to this site, so… not bad for my first day! An hour of reading you guys and I already paid for two months subscription! Thank you!

lchu

Phil – I wanted to tell you how much of a privilege it is to learn from your every day. You are a shining beacon in the life of so many investors. You have assembled probably the best group of people in the history of financial blogging and you, yourself have done more to help investors in the last 6 months than all previous financial advisors combined.

StJeanLuc

Thanks, after years of blood and blunders, I have reached a significant milestone – I don't lose money. Net net, I rarely have a losing week, market up, market down. And that I owe to you. Balanced positions. More premium sold than bought. Fundamental criteria applied to good companies, not momentum/ news headlines/ stock du jour/ triangle squeezies. But rather earnings, P/E, dividends, competitive position — the boring stuff that takes study, thought,….and patience. You have been a great teacher, and I have embarassed myself repeatedly day with how slowly I learn.
And it's a funny thing – if you don't lose, the gains start to pile up. The arithmetic is cruel to the downside, and becomes a gift in the other direction. And I'm in this for the long run, having made myself unemployable through a need for diversification. Moreover, what I've learned here has also elided into other areas, including real estate and ex-U.S. investment. Pretty cool. Have a great weekend.

Zeroxzero

As a fellow "low-end" investor I like Phil's Buy/Write strategy on solid stocks. Before I came here I loved to try to "figure things out" with very little success "TRYING TO FIGURE THINGS OUT"! I traded too much and fell in love with stocks that "should have done" what they didn't do. Now a majority of my accounts are in Buy/Writes suggested here or cash (waiting for a better time for more Buy/Writes). I use 15-20% of my total holding to short term trade and hedge. This is manageable with my full time job as a business owner. I have found Phil's system a more discipline way to achieve the returns I want without relying on my ability (more like inability to "figure things out").

DCalrk41

I subscribed to Phils Stock World full service for a year or so and found that it was extremely helpful. Now I just get the Stock World Weekly summary, which I find invaluable.
Phil does not baby people and certainly can't make someone into a successful stock operator who does not make the effort on their own behalf, but he is extremely generous with his time in answering newbie questions.
Although I found it difficult to follow and implement all his trades in real time, what I did find was that once you got the hang of his methodology and way of thinking, you could work out your own trades and be quite successful. Even just using his patent Rule Number One* alone is worth its weight in gold. Rule Number Two is even better.

Small but respected Egan-Jones' Vice-President, Bill Hassiepen said "We are not receiving QE3 positively. The fiscal situation is a nightmare. While the Fed is seeking to support economic growth through its quantitative easing, the central bank’s massive monetization is instead causing sluggish to stagnant economic growth.” In fact, he expects growth to become stagnant within six months as a result of the Fed’s policy. The reason the country does not have a weaker rating, he said, is that it remains “the only viable reserve currency in the world.”

Does any of that sound wrong to you? Hassiepen is just the first of many who are lining up to point out that the US economy has no clothes. Retail sales data was terrible, industrial production was terrible but consumer confidence was unnaturally boosted by a 10% rally in the stock market due to QExpectations. Which report does the MSM latch on to? Consumer Confidence – of course! Why bother going over silly data facts when people have opinions we can discuss?

The Federal Reserve’s “money printing,” Hassiepen said, has not “really contributed to the improvement in the general economy” so far. Instead, all it has done is increase inflation and the cost structure in the general economy, as will the new round of QE just announced Thursday. “We actually think this is going to cause unemployment, not employment,” he said. the Fed’s policy will reduce household’s disposable income and raising costs will also “lead companies to lay off people,” he said.

I'm not saying we shouldn't enjoy our free money that the Fed is doling out but let's take it with a grain of salt and not assume it's going to be a cure-all. As you can see from the chart above, after a VERY brief moment of euphoria post QE2, we did drop 5% the following two weeks. While we did get a nice pop last week – this week is the expiration of September options contracts and, as you can see from our Global Economic Calendar (thanks StJ!), it's a major data week with lots of Fed speak as well as potential economic mine-fields.

As noted in Friday morning's post, we shifted our short-term positions to neutral in the face of overwhelming monetary easing (see post for updated $25KP positions) but, during Friday's Member Chat, not only were we unable to find things to get bullish about, but we found new ways to short oil at $100 (DUG) and added a general TZA hedge as it hit a very attractive $13.50, dropping the Jan $10/14 bull call spread down to $1.50, which gives you a nice 133% upside without even selling any offsets.

That was our last trade for Friday, a bearish one. As offsets, we updated our Twice in a Lifetime list and there were many good long-term bullish candidates there but, short-term, we're just not convince the Dollar can move below 78.50 and we've yet to see the market make any actual progress on its own so it remains to be seen if any actual capital will move into equities or if this "rally" has all been nothing more than a repricing of stocks and comodities against a Dollar that our own Federal Reserve is doing everything in it's power to destroy the value of.

As noted in Dave Fry's chart, we think the Financials are the prime beneficiaries of QE3 but, like Egan Jones, we see no reason this will help the broader economy. Nor will the new IPhone 5 help the non-AAPL retail sector as we all know what the big present under everyone's tree will be this year (hint, not a kindle) and thee things are not cheap – those are discretionary consumer bucks being drained away by AAPL this Christmas!

We already call the Nasdaq the AAPLDaq as AAPL is back to 20% of the index and accounts for 75% of the indexe's gains this year as the move from $400-$700 is 75% and 20% of that is 15% and the whole Nasdaq "only" went from 2,650 to 3,200 – up 20%. So the other 99 stocks that make up the Nasdaq composite have only combined to add 5% to the index - and that INCLUDES a couple of AAPL suppliers, who have been flying as well. The United States of America is becoming a one-industry country – the very definition of a Banana Republic – it's the Appleconomy!

The Big Apple doesn't make any AAPL products and the Empire State Manufacturing Index came in at -10.41 this morning and that's the lowest reading since April of 2009, before there was ANY QE. That's almost double the negative 5.85 logged last month and over 400% worse than the -2% expected by leading economorons. As noted this morning by ZeroHedge:

The components painted a dire picture for jobs, with the employment index sliding from 16.47 to 4.26, New Orders tumbling from -5.50 to -14.03, while, wait for it, prices rose, from 16.47 to 19.15. Re-stagflation here we come.

Market for now seems confused – since QE is priced into infinity, it is unclear if this latest datapoint confirming a recessionary economy, QE can't be more-er infiniter. Best to not respond to this, or any other macro news at all, which is precisely what the market has done.

For those who missed it, not only has Bernanke doomed the global economy to stagflation and imminent food riots, while making the richest 0.001% richer than ever, he has completely broken any linkage between the economy and the market.

We're already seeing global riots breaking out and it's convenient to blame a YouTube video for setting them off rather than the US policy of exporting inflation at the same time as we cut our crop exports, causing Global food prices to skyrocket. Is this the first time an American video has made fun of Muslims? Of course not! Then why are we so uncritical listening to the BS the MSM is feeding us now?

Not to worry though, pre-orders of the IPhone 5 were over 2M in the first 24 hours, that's $1Bn in sales for AAPL in a single day and double what the 4S did on its release so things are looking up, Up, UP in the Appleconomy. As Mick Jagger once said:

This towns full of money grabbers.go ahead, bite the big apple, don't mind the maggots… Life is just a cocktail party on the street – Big Apple – This town's been wearing tatters, it's been shattered, shattered yeah!

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Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!

Newthugger

I must give kudos to Phil for changing my way of thinking. I'm a gambler by nature and used to just play the indexes with 3x etf's… well I still do, but the options give far better returns than I ever dreamed of. With these wild swings I've been catching 50-100% winners in days.

Mkucstars1

Oil – thanks Phil,
got in late at 0.53 on the 38p today, set a sell for 0.75 and took the dog for a walk – 70% gain and more than enough $$ to buy dog food. TZA Aug 35/40 BCS – closed out for a 100% gain in under a month – thanks again for introducing me to these trades.

CanuckBob

Thanks Phil, your note at the close was responsible for making those silly GOOG sellers pay for my NYC sojourn, nice!!

zeroxzero

You guys gotta give it to phil–the voice of reason yesterday, last nite and this morning.

Corleone

Thanks super helpful re: UGN example…..other inflation/market-correction-defensive-related play you threw out that has jammed UP in less than a month is TITN 6/14 $15 puts, up 40%. Excuse my enthusiasm but haven't had those types of gains in multiple plays in years let alone days doing it on my own…….maybe I should host the PSW infomercial!!!!

stevegeb200

Phil: I have 263 positions - 70% in options ( balance stocks) in three portfolios with a value of 3 mil. YTD profit is about $750,000. Thanks!

Gel1

I don't post much, but I guess this morning has brought me out. This site has made me tens of thousands, every year since I have become a member. It took me nearly two years devoting 3 hours per day to get on the ball, and actually understand portion sizing, and which trades fit my personal trading style. Before that I spent at least two years working on Buffet style fundamental investing. (Intellegent Investor, Security Analysis, ect.). This site really will teach you amazing things if you just pay attention. Literally it has changed my day to day life, has allowed my family and I to move back to the U.S. from overseas with confidence even with a paycut at my day job, and literally put me in a different league financially. Seriously my life and my children's is better because of this site.

Knightpilot

I have been around for many years now, was a modest inexperienced investor when I started, and I can honestly say I would not be at the point in my portfolio I am today without the guidance of Phil and JeanLuc and Yodi and all the others I've had the pleased of learning from and, on a few occasions meeting, over the years. Truly been a great experience.

RPeri

Phil, I don't know how I can thank you enough for your guidance this past week. I'm up significantly in my portfolio and I've never been so relaxed watching the market panic. Thanks once again for being here for us.

thechaser

Thanks, Phil!!! I just crushed today with it with silver (SLV) calls today, thanks to your persistent reminders of how ridiculously cheap it has become, and watching my TSLA this week $240 puts dissolve into chump change added an extra note of amusement.

Zeroxzero

Phil - I celebrate today, having reached my goal for the year, trading in sync with your education and guidance, of 1 million in profit. I learned a lot, achieved much, and am profoundly grateful. To be honest, when I set the goal I thought it was daunting, as I have for many years been an investor in equities but did very little with options. Learning and doing has for me been a blast!
I reached my goal by following Phil's strategies - lots of Buy/Writes, covered calls on equities , naked put entries for income production. I did it with 2.5 mil and kept 600,000 in cash in case I got in trouble. I concentrated on stocks (many of my own choosing) that had decent dividends and wrote front month calls against (OTM) which has worked well in this market run. 25% of my gain is in dividends and premium selling, with the balance in appreciation.

Gel1

On Optrader's section yesterday he was asked how he works with AAPL as an investment. He replied that he just ‘plays with the covers'. I've got a separate portfolio where I use primarily this technique over the past 6 months. Up 60% The principles involved are stock selection, patience, patience, using covers to protect profits, rolling covers to maximize premium return, and exiting when covers are gone and stock price is high. Sometimes it's hard to remember where you learn to do this stuff, but much of it is from integrating principles I've learned here with thing I already knew. Thanks for the help on this, Phil and others.

Iflantheman

Hey Phil,
You called all the trends and market movements with perfection this week. I enjoyed it! Thanks for keeping us sane!

GClay

Thanks for the USO directions today. Made it 3 times (up/down/up) for a very nice win.

Doro165

The wonderful resource that Phil has created for us and nourished by its members is so powerful in what it can teach us going forward, but also what we can learn from the past. I never say it often enough, but Phil – thanks for all the work you do for us.

Winston

Being a bear is easy (and I am not convinced we are doing all that well on the whole as an economy), but one cannot fight the trend (didn't Phil say that a while ago)? Just cover, make 5-10-15-20% and move on. It really does add up by chipping away. All I can say is I am back to 2007 levels in my account b'f the crash with this run up and some very nice help on this board….so kudos to us (and me!!)…

Pharmboy

Phil,
3 for 3! Sold on initial excitement and made a double on USO, 70% on AMZN and 70% on SPY options from Friday.
Thanks and much appreciated for the suggestions.

Gingbaum

Phil I have been applying your arsenal (matresses, Edz plays, Ugl verticals etc.) to my gold holdings . So a big thank you for "teaching me how to fish" rather than just giving me the fish...

Magret

New members – a word of advice: you should check out the track record of Phil's last few trades of the year, and what the return would be if you just rolled all the gains into the next years trade of the year. Remember – trade of the year is one he's virtually sure of, and he rarely misses on those

Deano

This is my first month here. Today was a money train with futures. I gained 7500 USD with KC, RB, CL, NG.
I took RB almost every direction up and down. And I only used 1 contract or maximum 2.
Thank you. I think it was a good investment to subscribe…

Kgabor

I have been here a year, and made most of my money back from the 14K fall. The people here are more than willing to help whe Phil cannot get to it. FWIW - This site is my brokerage firm, I was with Wells Fargo Portfolio and it was costing a fortune to trade, the costs here are more than offset with the data, trade ideas and profits you should make.. and I get a chuckle out of Cap and Phil's rantings on healtcare, guns, oh, yeah, and government….

Pharmboy

Hello Phil,
Thanks for the heads up on the comming sell off on friday, and the bs job yesterday. your our guiding light!

Microflux

Thanks Phil, I have adjusted my position by getting rid of the IYF puts, and selling the FAZ puts. You have so many of these awesome little tricks in your playbook that it really amazes me. I toally love your analogy by the way: Do you want insurance that you have to pay for, or do you want insurance that pays you?

Craigzooka

Phil: Closed out ZION with 49 % gain!

RMM

Phil – Not that you dont usually, but you have DEFINITELY earned your money this week. THe recommendations have been PERFECT. Selling into the initial excitement (MULTIPLE TIMES), hedges, everything. Im reading this when I get home from work and want to cry b/c I cant trade at work! I might have to start getting up at 3 AM though to catch those trades bc youre killing it then too! May you and yours have a blessed weekend!

Jromeha

Phil
Killed it tonight trading copper. Anyone who jumped in right after election is up about 75k on one contract!
Thanks

Kapella

Phil fantastic call on the markets… I owe you BIG…thanks and have a great weekend!

Kustomz

Well that was a fun day. Cashed out my GS 140 calls for about 35% profit and my AAPL calls for 38% gain. Not bad for 40 minutes of work. Back to 85% cash.

Singapore Steve

Phil - I LOVE these futures trades at random hours! I wasnt able to get in on the 612 part but if I had it wouldve been 130$ (2.6%) on a 5k contract in less than 30 minutes. I know you have to sleep, spend time with fam, ect but Im just letting you know that your posts after hours/late at night has made people who followed them a decent chunk of change. Thank you, we appreciate it!

Today's horrible piece of news, which at least on the surface was supposed to send the market soaring, comes courtesy of the Empire Fed Manufacturing Index, which printed at -10.41, the lowest print since April 2009, down from -5.85, and well below expectations of -2.0. The Index print confirmed the biggest 6 month drop since records began. The components painted a dire picture for jobs, with the employment index sliding from 16.47 to 4.26, New Orders tumbling from -5.50 to -14.03, while, wait for it, prices rose, from 16.47 to 19.15. Re-stagflation here we come. Market for now seems confused – since QE is priced into infinity, it is unclear if this latest datapoint confirming a recessionary economy, QE can't be more-er infiniter. Best to not respond to this, or any other macro news at all, which is precisely what the market has done. For those who missed it, not only has Bernanke doomed the global economy to stagflation and imminent food riots, while making the richest 0.001% richer than ever, he has completely broken any linkage between the economy and the market.

US DATA: Sept NY Fed Empire State Survey -10.41 vs -5.85 Aug. Text
says “conditions for New York manufacturers continued to weaken. The
general business conditions index slipped another five points to -10.4,
its second consecutive negative reading. The new orders index fell nine
points to -14.0, its third straight negative reading. Both of these
measures reached their lowest levels in almost two years. The shipments
index was little changed at 2.8. The prices paid index edged up to 19.2,
suggesting moderate increases in input prices, while the prices received
index hovered a little above zero for a fourth consecutive month. The
index for number of employees fell noticeably but remained just above
zero at 4.3, suggesting a slower pace of hiring.”

Phil mentioned about a TZA hedge which portfolio is he talking about. Still trying to get used to the member posts. Spent the whole weekend reading the thursday and friday posts. i am new here . So help here is appreciated.

That will depend on whether the policy seems to be working. So far, investors like what they see. The broader stock market jumped 1.5% with the S&P 500 hitting its highest close since 2007. Treasury bond yields actually edged lower (they typically sell off when investors are flocking to stocks) and the yield on the 30-year mortgage backed security plunged 15 basis points. The real test will be the behavior of spending, income and employment. The economy faces several strong headwinds, notably a recession in Europe and the threat of severe fiscal tightening at home through year-end. For that reason alone, a near term improvement in employment seems unlikely.

But thereafter, things look better. Between the ECB’s action last week and the Fed’s today, the world’s two most important central banks are bringing unprecedented resolve to bear on economic growth. The world may one day look back and conclude the first half of September was either a turning point for the global economy, or the final nail in the coffin of the doctrine of central bank omnipotence.

AMIT- TZA/Sank – The decay is not insurmountable. With TZA at $13.50, you can pick up the Jan $10/14 bull call spread for $1.50 and, if TZA goes lower, you can sell the $10 puts (now .25) for $1 (price of the $12 puts) and either keep the cheap protection or roll to improve.

Dollar diving back to Friday's low (79.85) and we'll see if they hold if. BOJ meets tomorrow and they've already indicated strong measures will be taken to get the Yen back down (and the Dollar up). This is where it gets interesting because, while YOU may not be able to fight the Fed, that may not be true of other Central Banksters.

The Dollar may be weak but materials are still going down as total lack of demand trumps stimulus so far.

NFLX falling hard on a downgrade from Macquarie. Not a big firm but doesn't take much to spook people out at these price-points. Check this out:

J.P. Morgan downgrades (I, II, III) AK Steel (AKS-5.8%) and U.S. Steel (X-4.4%), as well as Cliffs Natural Resources (CLF-4.8%), saying it doesn’t think steel fundamentals are supportive of a continued move higher beyond recent short covering after China’s infrastructure spending news and the latest QE round in the U.S., and that it expects steel prices to decline soon.

Shares of OpenTable (OPEN-5.4%) slump after Piper Jaffray downgrades the name to Neutral from Overweight. The outlook for upside earnings surprises for the company is getting a bit cloudier with its iPhone 5 visibility now a known quantity.

Now maybe they are pushing out weak hands so their clients can accumulate or maybe this is the truth – it's so hard to tell these days….

At first this morning, CNBC was dismissing the Occupy Group in Wall Street and saying today's 1-year anniversary rally was a failure – already it's become too big for them to ignore any further – should be an interesting day…

At the open: Dow -0.19% to 13568. S&P -0.19% to 1463. Nasdaq -0.26% to 3176.

Treasurys: 30-year +0.04%. 10-yr +0.06%. 5-yr +0.01%.

Commodities: Crude +0.27% to $99.6. Gold +0.1% to $1771.85.

Currencies: Euro +0.04% vs. dollar. Yen +0.52%. Pound -0.16%.

Market preview: Stocks look to open a bit lighter, as S&P futures -0.1% on renewed worries over the eurozone and rising tensions between China and Japan. Plunging NY factory activity is the latest sign of a weakening U.S. economy. Apple +1.2% after AT&T said sales of the new iPhone 5 set a record over the weekend.

Richmond Fed President Jeffrey Lacker has explainedthat he opposed QE3 because it's unlikely to boost growth, but if it does, it will lead to higher inflation. The FOMC's sole dissenter added that any improvement in unemployment appears to be held back by impediments that monetary policy can't offset. Finally, buying MBS's, or providing credit to particular economic sectors, "is an inappropriate role" for the Fed and is "the province of the fiscal authorities."

Bankers say QE3 could be limited by delays in processing mortgage applications, with banks reluctant to cut mortgage rates without the staff to process any increase in business. “In the very near term [QE3] has virtually no transfer mechanism whatsoever to the customer,” said one executive at a top lender. “Originators are massively backlogged in terms of origination volumes.”- What total BS, volume is not even 25% of what it was when they were making Trillions in bad loans at high rates.

Capital One (COF) saw delinquencies rise in August even as charge-offs declined somewhat. The bank's 30-day delinquency rate rose to 3.37% from 3.09% for U.S. credit cards while charge-offs dropped to 2.58% from 2.62%.

Tens of thousand of people marched in Madrid and Lisbon yesterday to protest austerity measures in Spain and Portugal, where demonstrations were held in 40 cities altogether. The 65,000-strong protest in Madrid followed a rally of over a 1M in Barcelona four days earlier and after the government said on Friday that further austerity measures were imminent.

The dollar regains a bit of composure after last week’s rout, as escalating tensions between Japan and China trigger profit-taking on last week’s Fed-induced gains by the euro and other currencies. Japan-related stocks fall sharply in Shanghai and Hong Kong, as anti-Japanese protests erupt in China amid a territorial dispute that threatens to hurt trade ties between Asia's two largest economies.

The U.S. plans to announce today that it will file new WTO complaints against China over export subsidies and duties on U.S. auto products. Though the announcement is politically tinged with President Obama in Ohio today, the case against China accuses the nation of over $1B worth of unfair subsidies in the auto industry.

Tyco updates its Q4 outlook after figuring some aged China receivables may not be collectible. The company's taking a charge of $40M-$60M to increase reserves and cut its revenue guidance by $25M. The firm also reduced operating margin expectations in the Fire & Security segment to 11.2%-12% rather than 13.5%, and in the ADT residential/small business segment to 23.5%-23.75%.

Morgan Stanley lifts Tesla Motors (TSLA) two notches to Overweight after having the electric vehicle maker slotted at Underweight. The key part of the comments out from the investment firm is that it thinks fears that Tesla is having a manufacturing slowdown are "overdone." TSLA +7.9% premarket.

If Starbucks was able to improve its margins with coffee input prices rising, SA author Mathias Holmstrom can't help but wonder will it be able to do after lower coffee prices cycle throughto its forward purchase contracts? It's this juicy proposition that has Starbucks looking attractive for another run higher.

What’s interesting is that despite the higher valuations, the S&P 500’s Price/Earnings Ratio is still lower now that it was at any point from March 1995 to October 2008. And except for some brief periods, the market’s P/E Ratio is currently lower than it was during the vast majority of the time from 1991 to 2010.

Spanish Yields per ZH: Spain's 10Y spread has risen a very notable 36bps and the 10Y yield has just broken back above 6% for the first time in over two weeks. However, the seemingly impregnable short-dated market has started to crack. Spain's 2Y has also broken back above 3% - up over 50bps in the last 3 days!

villashaka…AAPL…there is a soft pattern of retracement after 2 pm or so. If we sold calls it would be to protect the long side gain and / or to garner some profits from the covers, and after 2 pm would be the logical time to do that. Did you see how we peeled $1800 off those 18 AAPL covers on Friday, then got rid of them?

Now. I know many at PSW might be shocked by the reverlation that certain Chinese firms who have borrowed money against Steel did not in fact own it but … well you can read it here.http://www.reuters.com/article/2012/09/16/us-china-steel-warehouse-idUSBRE88F0EJ20120916
Obviously this is not the same as lending someone money to buy a house when then did not in fact have an income (remember self cert mortages) so it absolutly will not end badly for the second largest economy in the world…. Tick tock.

Amit – you should go back and read past 1 months posts. This will help you to get the lingo. The above post by Iflan (sell Sep 57.5 calls) will take up over 30k of non PM margin. If you don't understand what is being said you can lose a lot of money.

Regulators obviously have an enormous challenge. These complexities were always a challenge; now they’re more so. But I think the regulators and markets and government have been imbued with the idea that markets left alone will discipline themselves. In a way, the regulators are outgunned. They do need the support of the senior executives of the institutions. If the talent at the top is forgiving of bad practices, or even encourages these practices, it’s going to be very hard for the regulators to do anything. It comes back to this: what is the punishment when wrongdoing is found?

And

Well if you’re just aiming for a balanced budget—it would be extremely difficult to achieve without some significant reform in the entitlement area. We’ve also got to take some look at the defense area, where expenditures are so large relative to the rest of the world that there might be some room for savings. But on top of that, you’re going to need some additional revenues. It’s not possible right now, but we need a real structural reform in our tax system if we’re going to approach equilibrium between spending and taxation. In addition, we’ve got great budget pressure on state and local governments.To put it bluntly, we have to move more toward a consumption tax. There are different ways you could do that, but that’s what we ought to be doing.

ARNA – I agree with the article now that they have the approval they needed.\

AVNR – don't like them at all.

DEPO – their technology will continue to catch on. Just a long(er) term accumulation to sell premium against.

YMI – Stock, selling 3 mo calls against at 1/2 positions.

DUSA – well, I think they are fine, but I have to put a disclaimer that I am an owner of a competitor of which I like better (private co.). Their therapy works ok, but with the cream and blue light, other light sources are cleaner and more efficacious (IMHO) than this.

Phil/"Wealth Effect "- Oil to $130 by EOY 2013 chart. Bottom 80% own only 7% of financial wealth pie graph. My hope of an "idiot savant" Fed is now coming to the reality of simply "idiot". Ben is obviously long stocks and the Mayan Prophecy Dec 21st, 2012…=o

TZA/Amit – Welcome! TZA was just the spread described in the above post ($10/14) and you can sell a put in a stock you really want to own for the net strike to offset it (see Thursday's chat for TWIL list). As Savi says, this is not in the Portfolios (most of our trade ideas are not) – just a good overall hedge.

DB/ZZ – That's not good.

AAPL $699.08!

Income & $25KPs – Way too uncertain to do anything at the moment.

Oil/Jrom, Jasu – With all this tension talk and QE – they may be finding buyers in longer months easier than usual.

Fantastick Momos Lflantheman!

KLAC/Davidor – They are just lumped in with the general semi weakness (non-AAPL, of course).

Main street/Rogue – People don't instantly refinance, it takes ages for those savings to be realized – if at all. In the current environment, it's so hard to qualify that very few are getting done – even with government incentives.

P/E Ratio/StJ – That's why this will be a make or break earnings quarter. If those Es come down, that ratio can change very quickly. Still too optimistic I think and, like all things, way too much AAPL in the mix to be reliable.

SPG/Range – You were supposed to remind me on the weekend! I'll check soon.

phil,
please explain:Oil/Jrom, Jasu – With all this tension talk and QE – they may be finding buyers in longer months easier than usual.
What happens to the 119,005 contracts they have open in Oct….how is that resolved…Thanks

Phil – I bought a couple of /CL puts expiring in Oct. Was curious if you had any insight as to what's going on. Crude is only up around .25 cents but my $96 put has fallen over 40 cents today! It's strange…

Pharm, they won't be happy until the M2 velocity is negative! It's like the square root of -1, it's an imaginary number. Maybe little George Washington One dollar bills will start producing goods and services like little Santa elves…

stock…….That play would not make sense. It would mean AAPL would have to get to 890.55 by Jan 2013 for you to make money. Won't happen. Not even remotely possible. You need to think about something more sensible for a long-term play, like perhaps doing a Jan 2014 750/850 and selling some far out puts to help defray the cost of the spread.

Europe closing already? Just 8:30 in LA – seems too early. Not a great day over there, down .05-1%

Steel/Malsg – So much fake demand in China, if they ever stop with their stimulus, many sectors will drop like rocks.

Volker/StJ – The Reps would chop him faster than Bernanke.

Copper/Rpme – FCX is best to trade copper. They are not pure (25% gold) but that's not a bad thing. I like to stick with efficient operators over time (like ABX), as they tend to weather a downturn much better.

Mayans/Rogue – I wonder how many people are going to wake up on 12/22 and suddenly realize they are going to live and have way too many debts.

PCLN/BDC – Big boost for them from Euro recovery. Depends when they book the exchange but if they keep the money in Euros until EoQ – look out for a major pop (then they'll be a great short). CMG I think is good for another disappointing Q.

Hussman/RDN – You picked up on that, did you? ;)

As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I don’t want to overstate. This is an extreme data point, but there has been no abrupt change; no sudden event; no major catalyst. We are no more defensive today than we were a week ago, because conditions have been in the most negative 0.5% of the data for months. This is just the most negative return/risk estimate we've seen. It is what it is.

DUG/BDC – Too far out – causes decay worries.

Velocity/Pharm – I keep seeing that down 20% estimate and I don't get it. If supply is up 300% and velocity is down 20% – why would our GDP be essentially stagnant? Clearly money is not moving that fast – where are the refis, the M&A activity, the infrastructure spending, capital equipment purchases, construction? Down 20%? I don't think so..

Contracts/Jasu – Just like a short put option you don't really want to own, NYMEX traders must roll the contracts to longer months to avoid taking delivery of the oil on expiration day. Also like underwater short puts, they can pay a premium to completely cancel the contract as well but then they take the loss and it's a big loss at 1,000 barrels per contract so they'd much rather roll. The more they can spike oil now, the more speculators begin lining up in longer months and that makes it easier to roll their contract. By Thursday, they need to be below 30M contracts.

AAPL/Stocksand – That's crazy dude! AAPL is a $700Bn company at $700 so you are going to bet they add $200Bn in markets cap (30%) between now and Jan expiration? Don't you think that's a bit overly ambitious? There's a reason that spread pays 20:1, the odds are 20:1 against it happening – actually, much more so but guys like you pile into a 100:1 bet and drop the odds 80% from what they should be (parimutuel betting at it's finest).

Dollar 78.995

BDI/BDC – Mostly the result of a massive glut of cargo capacity as we're right at 5 years after 2007, when the ships being delivered right now started being built. Not only were many new ships ordered but they never decomissioned the old ones as the economy turned sour so – huge glut of capacity.

Oil/Jrom – Haven't you heard? Israel is about to attack Iran! Same old BS scaring people out of short oil positions across the board. One day, they might be right but, since 1973 – not yet.

Shouldn't there be a long AAPL/short AT&T trade? I mean, if IPhone 5 sales just set a record for them, that means that the highest number of profitable accounts (old iPhones out of contract) ever just converted to loss leaders for the next 24 months. For example, I've been holding off for the last year replacing my old iPhone 3gs, waiting for the iPhone 5. That means that T has been getting about $35/mo in pure profit from my monthly phone bill. Of course I'm going to get a new phone now, because it doesn't make economic sense for me not to.

I see a trade I like, but will NOT be putting in the MoMo (it would use too much margin). CMG has been pushed upward today by a favorable ITG research report, and I think that will keep it above 340 over the next four days. Selling some weekly puts on the stock at about 340 or 335 makes sense.

Phil…WHR …What the FU…up 37% in 60 days. SLD 10 sept 75c and 10 sept 77.50c at 3.65..now 13.50. Still believe in the position,but waited too long.FU QE3. Got any DD thoughts on a DD out? or did I just fall in love with my hand? Keep up the good work.

Hussman – he is a fantastic commentator, unfortunately the same cannot be said for the returns in his funds. For market forecasters, predicting frequently and posting incessantly means that at certain moments in time you will be able to refer back to the time when 'I told you so' will come true. Perhaps better to make money than be right.

YHOO/Ksone – Does she have a time machine? That's what it will take to fix YHOO at this point. They should have sold to MSFT when they had the chance.

T/RDN – I think at this point they've proved the model.. The down move T once had was investors not believing that they could turn a profit off the investment — certainly not even in question anymore.

Congrats Jasu!

Great oil article, Edro – thanks…

WHR/490 – 20 naked short calls? Ouch! I sure wouldn't DD with QE3 in play on durables. Well, you're down about $7 x 20 and you could roll to 20 short March $90s at $5.10 and sell 20 $67.50 puts for $3.05 and buy 20 2014 $95/105 bull call spreads for 3.20 – to make sure you don't get burned again.

INTC/Amit - I wish they were cheaper but good idea.

Hussman/Winston – Pity the fundamental traders in this market.

SQQQ/Villa – It's a good spot but you have to be righter than you think because there is some decay over that length of time.

Appeal/Ink – Oh come on, what next – due process? These liberals are out of control…

Solar/jrom – WFR springs to mind. Very iffy in general over the short run but, long-term, a great sector..

SPG/Range – The dividend is now a whopping $4.20 a year and the low rates should really drive their cash flow. It's a little worrying that they have started diversifying internationally as it stretches out management but generally they have been great and I do agree with their assessment that the pickings are slim in the states by comparison. So, I certainly like them but $165 is a bit steep to collect $4.20 and I'd rather not buy the stock and sell the 2014 $119.80 puts for $6.40 and worst case is you own them for net $113.40. As to the put spread – If that's a short spread I wouldn't waste my time and, if it's a bear spread – I wouldn't bet against them.

Yentervention/Chas – Yes, that's the BOJ looking to weaken the Yen, usually by buying dollars.

IWM/Shadow – That is a concern.

Gasoline/Savi – I just think it's unaffordable an also unjustifiable with considerably less demand in the US. If they manage to justify oil over $100, then gas will go up too but I just paid $70 for a full tank at the Rent a car in Vegas (to return empty) as it saved .50 over LA prices. This is a ridiculous amount of money for working people to have to spend – it just can't last.

Yentervention/Jasu – Well it's the short oil, short gold play on the Dollar getting stronger. You can play NKD or EWJ but I'd get out on the initial excitement.

Well I sold into the excitement on that 2nd oil spike down. Thanks, Phil's voice in my head telling me not to be greedy!
Also, AMZN looks like it made one of those spinning tops thingys on Friday. That's bearish, right?

Third, and more importantly, as China’s economy rebalances towards a much more sustainable form of growth, this will automatically make Chinese growth much less commodity intensive. It doesn’t matter whether you agree or disagree with my expectations of further economic slowing. Even if China is miraculously able to regain growth rates of 10-11% annually, a rebalancing economy will demand much less in the way of hard commodities.

And fourth, surging Chinese hard commodity purchases in the past few years supplied not just growing domestic needs but also rapidly growing inventory. The result is that inventory levels in China are much too high to support what growth in demand there will be over the next few years, and I expect Chinese in some cases to be net sellers, not net buyers, of a number of commodities.

This combination of factors – rising supply, dropping demand, and lots of inventory to work off – all but guarantee that the prices of hard commodities will collapse. I expect that certain commodities, like copper, will drop by 50% or more in the next two to three years.

The fact is that fuel-economy standards are a pretty good way of ensuring that carmakers can plan for a more fuel-efficient future, without worrying about competitors undercutting them with gas-guzzlers. If the US government ever comes to its senses and increases the gas tax, or if it — wonder of wonders — actually implements a broader carbon tax, then at that point you would have three different forces conspiring to make America’s fleet more efficient. You’d have the tax, you’d have the fuel-economy standards, and you’d have the general global increase in fuel efficiency.

Without new taxes, we’re down to two; and without new fuel-efficiency standards either, we’d be down to just one. And that’s dangerous, because the US market is big enough that at that point there’s always a risk that we could replay the era of SUVs and Hummers, with manufacturers of small, efficient cars running a risk that they might get crushed if oil prices fall.

Fuel-efficiency standards are a way of preventing car companies from being forced to hedge their bets by working on gas guzzlers as well as efficient runabouts. As a result, those companies can take the money they’d otherwise spend on developing six-ton monsters, and invest it instead in the efficient cars of the future. Everybody wins, and the cost — contra Porter — is negligible. He’s absolutely right that higher gas taxes are a very good idea. But that’s no reason at all not to implement higher fuel-economy standards as well.

Morningstar says U.S.-stock funds and ETFs tallied yet another month of outflows in August, losing $22.4B during the month, making it the worst in two years for the asset class, and its fifth worst over the past five years. On the fixed income side investors were bullish, pouring $26.4B into taxable-bond funds and another $5.6B into municipal-bond funds in August.

China files a trade complaint with the WTO challenging a new U.S. law allowing tariffs on subsidized goods from China, swiftly responding after the U.S. said it would launch a complaintagainst Beijing's support for car exports. Products involved in China's action include steel, tires, magnets, chemicals, kitchen appliances, wood flooring and wind towers.

ArcelorMittal (MT-2.7%) says it will close two blast furnaces and a foundry in Belgium rather than invest over $180M to save the plant. The operation has been bleeding money away from the company for over a year.

Patriot Coal (PCXCQ.PK -6.4%) says it's temporarily suspending about 85K tons of steelmaking coal production per month, citing a continued deterioration in market demand. The production cuts will occur at three Southern West Virginia mine complexes over the next 60 days.

Shares of Valero Energy (VLO-3.6%) slide after Citigroup cut its rating to Neutral on valuation after the shares hit a new 52-week high of $34.35 last week. - Are we seeing a trend here?

Moody's cuts its forecast for 2013 growth in the auto industry to 2.9% with downwards revisions to sales in Europe and China pushing the overall global projection lower. The ratings agency maintains a stable outlook on the sector for the next year to 18 months, needing an outlook of 5% growth or better to move to a positive outlook.

Negotiations continue in Canada between the Big Three automakers and the Canadian Auto Workers with a strike deadline set for midnight tonight. The CAW sent an update to members telling them to stay on the job for the day as it hopes to strike a deal first with Ford (F-1.9%) before bringing it to General Motors (GM-1.4%) and Chrysler

A profit warning from Swedish clothing seller Hennes & Mauritz (HMRZF.PK, HNNMY.PK) appears to have crossed the pond to taint select retail names in the U.S. Foreign exchange headaches and unseasonably warm weather contributed to a 4% decline in H&M's same-store sales after analysts had called for a gain, raising some questions on the sector only a week after Burberry's own warning rattled luxury names. Feeling the heat: NWY-2.7%, CBK-2.2%, BODY-1.6%, BONT-1.8%, SKS-2.5%.

Shares of Deckers Outdoor (DECK-4.2%) trade lower after Sterne Agee analyst Sam Poser warns that channel checks show sales of Ugg sales are off to a sluggish start to the season. If the fashion boots don't keep their fad status, Oxen Group notesthat making the bull case for the stock gets a bit tricky.

Better late than never: McDonald's (MCD+0.4%) plans topush back the annual launch of its McRib sandwich to late December in order to maximize sales of the limited-time wonder hit. Industry insiders say that the timing of the change so close to the original release date slated for late October could be a sign the company is worried about Q4 sales

Chipotle (CMG+3.6%) gets a little momentum going its way after channel checks from ITG Research reveal that Q3 same-store sales are tracking in a brisk 5.5%-7.5% range. The company is seeking to beat back a challenge from Taco Bell's newly-styled Cantina Bell menu and improve its customer turnaround time in order keep its growth story fully in play.

In a PR-heavy interview with the Seattle Times, Steve Ballmer suggests Microsoft Surface tablets will sell for "probably $300 to about $700 or $800," declaring that area to be the "sweet spot" of the PC/tablet market. Ballmer, who seems intent on remaining Microsoft's (MSFT) CEO for now even though many want him to leave, also belittles Google (GOOG) as "just another big company at this stage."

Intel (INTC-0.5%) and AMD (AMD+0.5%) have each been downgraded to Neutral by Longbow on accountof PC-related worries. But it doesn't look as if the Street cares much, given how bad news has already arrived and been baked in.

Shares of OpenTable (OPEN-5.4%) slump after Piper Jaffray downgrades the name to Neutral from Overweight. The outlook for upside earnings surprises for the company is getting a bit cloudier with its iPhone 5 visibility now a known quantity.

LinkedIn (LNKD) brags it now has over 10M registered U.K. users, or 4 out of every 5 professionals in the country. The business social networking giant recently claimed 62% of its 160M+ registered users, but only 1/3 of its revenue, now come from international markets.

More on Evercore's bearish call on Groupon (GRPN-6.6%): In addition to re-hashing his cash flow concerns, analyst Ken Sena claims Groupon's marketing expenses are once again rising as the company tries to combat "daily-deal fatigue." Groupon's marketing spend fell 58% Y/Y in Q2, and was the main reason its EPS beat estimates even though revenue missed.

Macquarie adds to Netflix (NFLX-5.4%) slide this morning after initiating coverage with a tepid underperform rating and a downside price target of $50, nearly 17% off current levels. The firm says that increasing content costs and greater competition are continuing to wick away at its bottom line.

Netflix (NFLX-5.3%) could lose access to content from A&E Networks as soon a this Friday with negotiations still ongoing over a content contract. If a deal isn't struck, look for another major digital player such as Amazon, Time Warner, or Hulu to step in to land an exclusive deal for the stable of channels that include A&E

Square is now handling transactions at an $8B/year run rate thanks to its millions of card readers. That's up from $6B/year in June, and is a figure that has to strike fear into VeriFone's (PAY) heart. And perhaps also PayPal's (EBAY), given how it'sscrambling to catch up to Square's lead in the card reader andmobile pre-pay fields. The news comes as Square closes a $200M round at a $3.25B valuation, and its COO predicts iPads will soon make cash registers a relic.

The international situation is really interesting – big protests in front of the US embassies in Muslim countries because of a movie. But Assad kills 10's of thousands of his citizens in Syria (most of them Muslims) and yet, no protests in front of Syrian embassies! I guess my problem comes in trying to use logic to understand people.

Pharm / VVUS - you were on vacation a few weeks ago when I called an audible for you and suggested here that people get out of their VVUS shorts around 22. Later, I actually nibbled at some longs when it hit 21 and that's working out, so with today's bullish engulfing candle do you think I should pick up some more? Anything interesting on the horizon for them?

St Jean – the problem is religion. All religions…SOme are just crazier than others. Besides our supposed allies (afghan miltary/police) killing us daily things are pretty calm here. I see the headlines on CNN but besides a small group throwing rocks (not outside our embassy like CNN said but outside Camp Phoenix a few miles away), things in Kabul have been very calm. At least in this area we just have to make it another month and then it starts getting colder and all the crazies decide to hibernate for the winter…
It's been a good day. SOld 1/2 oil shorts and have made 300 or so shorting oil in the 96.4-96.5 range and covering after it falls 10 cents or so. Time to call it a night. Hopefully tomorrow is as eventful!

Phil/WTF? - Soybeans and corn dropped over 5% today, oil around 4.5% from peak almost instantly…better go fill up your gas tank and grocery cart peasants, quick before it reverses! And they wonder why people like me do not trade more than a few hours at a time at this rigged casino anymore. Instead, I just closed another land deal today, making a six figure profit, a 46% return, on a two year land flip mostly because of your crazy free money system that is driving big money into land speculation. There is more than one way to skin the Fed without risking it all in a flash crash! Yet what good is all the money we in the know are accumulating if 99% of the rest of the globe is left behind for broke!

VVUS/mrm – apologies… they have nothing….if they sell their ED drug, then they could have an inflow of cash, but I still do not see a market for their drug, and they will have to do it all on their own.

Pharm / VVUS - thanks. That's why I didn't post my buy here, was purely speculative. Will run with tight stops.
On SGEN, do you have any feel for when this blow-off will bottom? I made a great exit on my SEP calls at 29 but want to get back in with some DEC spreads when this downtick ends….

Good job Rkyroma. I think they may fall further but, if you make good money – no reason not to take it.

BBY/Den – I do still like that one.

No SPR/Ink – That had nothing to do with it. Was just a NYMEX excuse to distract people from fact that they routinely order 20x more contracts then they could possibly want delivered to jack up prices and, sometimes, it bites them in the ass.

Logic/StJ - Assad is no immediate threat to them but US is driving up the cost of commodities worldwide and making their families suffer and threatening their ability to put food on the table – so who are they going to protest?

Land/Rogue – I feel the same way about land, very good time to make some good deals with play money from the Fed. Speculation drove up commodities already and I'm not sure the Fed did enough to support that lunacy and, more importantly, there is nothing the Fed or the ECB did that in any way is going to promote sustainable increases in actual commodity use and speculators aren't quite as dumb as you may think – down the road – at some point – they do want to see a light at the end of the low-demand tunnel. It's just not there are the moment.

Stocks are equally over priced for the same reason but, unlike commodities, it take an earnings report to slap people back to reality.

SCO/Pharm – I do think we can do much better. Hopefully oil fails $94.50.

Commodities / Phil – I don't think that the people protesting see it that way. And besides, China and Europe are also in the QE binge and it could be said that China is more responsible about commodities prices than anyone else and yet no protest in front of the Chinese embassies. There is always a latent anti-America sentiment (and Iraq didn't help) and crazy people ready to throw gasoline on that fire.

Commodities/StJ – The film is a spark, the resentment simmers against those you fear and those who are causing you pain. They read the same papers we do, hear the same commentary on our cutting back corn and soybean shipments, that our Fed just keeps printing money and causing inflation, that our President want to drive down the price of oil, sanction Iran for wanting to develop an alternate-energy program (their version), etc. Those things simmer and don't need much of a spark to boil over.

SCO/QC – This morning would have been better but I do still like them (risky though).

Stj: We're in a giant global downturn, and religion has always been the opiate of the people, and I wouldn't confine that to Islam by any means. Christianity is currently responsible for a substantial percentage of Americans voting against their own economic interest, leaving aside any mention of Catholic and Protestant harmony since the 1400s. Irrational beliefs drive a terrifyingly large percentage of human behavior, of which my option trading practices are a shining example.

Sorry for having to leave the site abruptly at about 1:35 p.m.
newt…yes
aaronc….yw
Gingbaum/Amalfi…..holding all positions overnight
The strategy on AAPL is to maintain a long position, with now 1/2 covers. This will allow us to profit as the stock goes up. If it goes down, we repurchase the covers and purchase more longs.
NFLX acting well. As long as it remains below 58.97 by friday close, we make money. I would likely repurchase the calls beforehand if we got enough profit squeezed out of the trade……50%?
CMG…this is not in the MoMo, but I did sell some weekly 340 puts, and look for this to hold 340 .

Just a few of my trading rules….. for contemplation……
Trade just a few stocks, and know them all well.
Ride winners, cut losers quickly
Never get emotionally involved. These are stocks, not your girlfriend!
Never sell naked calls or puts around an event.
Never sell naked calls on any company that could be bought by another company.
Listen to other traders. You can always learn something useful.
Trade according to your own psychological makeup.
Unless you have done the 10,000 hours, don't try this at home.
Don't get too confident. That's when you will get nailed .
Position sizing is important.
Name your own price. Pay what you want, not what they want.
Listen to your instincts. That is your brain thinking subconsiously.
And on that note, I would say….it is my instinct that "AAPL ain't done yet!"
See you tomorrow.

IBM / Dpas – I would first worry about $210 which was a resistance line in the spring. And we are only $3 from there. Historically speaking, they are not cheap at about 15x earnings. So we might need to see their earnings next month (10/16) to provide more ammo to the next move!

IBM / StJ – Thanks for your response. I was just looking at the chart, was planning for a Bull Call spread, so that i can release the short caller in case of a pull back (possible cup and handle forming if it gets rejected at 210$). Cheers again!

I never used a swear word on this site before but Romney has FUCKED his chances on winning the Presidency. This is what he said when he didn't know tape was still rolling:

“There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. These are people who pay no income tax.”
Romney goes on to say;
“My job is not to worry about those people. (cmphasis added) I’ll never convince them they should take personal responsibility and care for their lives.”
So much for the notion of the President of the United States being the president of all the people.

Romney and all Republicans still love to use that 47 percent number not distinguishing the fact that half that number are retirees and a portion of those people are self employed who pay 15.3% in payroll taxes which is 2% more than Romney paid on 20 mill a year.

So the country is divided in two: on one side, the self-sufficient and high-achieving Republicans and on the other side the losers who think government needs to take care of them.

This is the caricature of Mitt Romney, who was born on 3rd base (in Ann Richards memorable phrase), thinks he hit a triple and thinks the broad middle class who've relied on government for student loans or social security or anything else are losers who can't get their act together and take responsibility for themselves. Only this tape says that caricature Mitt Romney is the real Mitt Romney.

Big problem.

I don't know how you recover from that! I guess Christmas came early for Obama this year.

It's just unreal how entitled people like Romney can actually feel that way. It just blows my mind! We have talked about that before but every time I have a conversation about life with my 2 daughters I always remind them how much luck has played a part in our collective lives – where we were born, what physical and intellectual gifts we inherited, what people we encountered who help us and so on. And that SOB who was born in one of the best environment possible is not even capable of recognizing that fact and the fact that many others have not been so lucky or gifted and might need help… Some of these "entitled" people work 2 jobs and barely make ends meet. And who can speak of entitlement when you pay 15% taxes on all the money you make – that carried interest loophole has to be the biggest entitlement program in the US. It boggles the mind! It's just sick.

And one more thing – under the Ryan plan (I encourage all to read it) dividend and capital gains are not taxed so someone like Romney would pay no taxes. Is he mooching then? Would all his friends be entitled lazy bums? I guess it is different when you pay no taxes on millions. If you pay no taxes on $20k you are lazy. If you pay no taxes on $1 million you are a job creator.

Stj: You're spinning it, and Romney's advisors will spin it. Romney will try a "judo throw" on this one: use the large-scale press coverage of the "secret Romey recordings" to prove the candid sincerity of his message: that 47% of the population are on the dole, want handouts, aren't interested in working, and will vote for Obama to keep the Obama/Bernanke Deficit Party going at the expense of America's Future.

It may not work, but the attacks on U.S. embassies abroad, including the first killing of an American ambassador in 20 years, which appeared to have been met by Obama with only tolerant appeasement in condemning anyone who "hurt the feelings of Muslims," is not doing him any favors either. It looks like Obama has the edge for now, but U.S. embassies have been attacked in Libya, Egypt, Yemen, Sudan and Tunisia without a noticeable U.S. response, and today Hassan Nasrallah, the leader of Hezbollah ["Party of God" in Lebanon, gave his first public speech since 2008 condemning "the film," so this story still has legs.

Bottom line, the American people are feeling particularly embattled both politically and economically right now, somewhere between 16 and 24% of American voters already think Obama is a Muslim, so this is still a horse race that can be lost by either candidate. The debates will be crucial, and it isn't clear that either of them is more persuasive or articulate than the other. The incumbent traditionally has the edge, but I wouldn't be buying calls on either of them right now.

Zero – Romney didnt really even win the debates against other republican contenders.
Attacks on embassies without a visible response? What are we supposed to do? He sent Marines out to reinforce the embassies. No one will be climbing fences anymore. I thought it was an appropriate (abeit a little slow) response.

Hi Everyone still crusing in Germany. Just having a hard time with the internet. It is sometimes hard to follow you guys as sometimes the internet stick I purchased gives only 20 to 60kb/sec pending location so doing a single roll can take 5 to 10 min.
Meanwhile I do not see any type of recession in Germany, Switzerland, Holland or Austria. Restaurants are full hardly can get a free table to eat, RV parks are full up to now but getting better not so full after the schools have started again.
News are full of Mohamed reporters and topless Kate. I can only say do not give the bastards food but shovels, so they do not waist their time rioting and killing people but plant things to eat!!!!!
Topless has she got any boobs at all?
All good luck in trading, Will be back in the head hunting country after the 15th of Oct. Regret to say however I do not miss the place. There are to many beautiful things and places to see in Europe.
Regards Yodi

From the Atlantic Monthly - http://www.theatlantic.com/politics/archive/2012/09/where-are-the-47-of-americans-who-pay-no-income-taxes/262499/ Almost all the states with most of the non-taxpaying citizens are below the Mason Dixon line and firmly in the Republican camp. The highest percentage of full taxpayers is my liberal state of Massachusetts. And we sure are getting tired of those lazy Republicans in the band from Texas to Florida living off our hard work! All kidding aside, what a senseless campaign we are having. Imagine what the debates are going to be like.

Spain’s benchmark borrowing costs have climbed back above the 6 per cent mark again as investors start to grow impatient with Madrid’s delays in applying for help from the eurozone’s rescue vehicles and central bank.
After a strong rally since the European Central Bank unveiled its plans to support the sovereign bond markets of the currency union’s embattled members, Spanish and Italian borrowing costs started to rise once more on Friday and continued their rise on Monday.
Spain’s benchmark 10-year borrowing costs peaked at 7.75 per cent in July before dipping to 5.55 per cent last week.
But on Monday the 10-year yield rose as much as 22 basis points to a shade over 6 per cent again and was at 5.99 per cent late in London, according to Bloomberg data.

You have to be kidding Zero – in 2004 when Bush was running for re-election, kids were being blown out every day in Iraq for a war that a lot of people didn't support. And we never found the vaunted WMDs. And Bush got re-elected anyway. So getting people killed in war is a sign of strength? And BTW, I don't think Al Qaeda think that Obama is that weak. You are giving in that appeasement spin yourself there…
But insulting 1/2 the people in the country, including a big portion of your electorate (retired white folks for example) is not that easy to spin…

Debates/zero -- I'll second Stj "you've got to be kidding!" Romney is very unpredictable when speaking without a script.Corporations are people, I like to fire people, the $10,000 bet, and so many more hits! You can bet Obama will come prepared to catch Mitt in some of his many contradictory positions and Obama's real world diplomatic experience will give him a HUGE advantage in the foreign policy debates. Plus the likeability factor will be very obvious side by side.

Thanks StJ for the oil lines early in the morning.
We failed S3 yesterday (3 days before last trading day)
I bet we will revisit S1 before drifting higher towards PP
Oct-Nov spread is quite large at 31c

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